Tyler holds public hearing on FY2026 budget; council hears tax-rate, utility fee and capital proposals

The Tyler City Council held a public hearing Aug. 27 on the proposed fiscal year 2026 budget and a proposed property tax rate of $0.236452 per $100 of taxable value.
City manager Ed delivered a detailed budget presentation that outlined revenue assumptions, proposed spending priorities, and a set of fee changes. He said sales tax — estimated at about $44 million for FY2026 — is the city’s largest revenue source, followed by property taxes and franchise fees.
The proposed property tax rate of 23.6452 cents per $100 valuation is lower than the current 24.0085-cent rate, but staff noted it is higher than the “no new revenue” rate; the presentation showed the average homestead in Tyler would see a $32.41 increase on its annual city tax bill under the proposal because average appraised values rose.
Ed described proposed utility fee changes tied to federal consent-decree work: the regulatory compliance fee would rise in two phases — from $19.70 to $22.94 effective Oct. 1, 2025, and then to $26.17 on Jan. 1, 2026 — to fund debt associated with EPA-mandated projects under a 2017 consent decree.
The proposed capital program includes $14.5 million of cash-funded water and wastewater improvements (service line replacements, water main work, Lake Palestine treatment-plant upgrades, taste-and-odor projects, plugging unused wells per TCEQ requirements, and West Side Wastewater treatment plant rehabilitation as part of a 15-year plan). Staff also proposed $70.168 million in overall capital projects with roughly $500,000 dedicated to drainage and erosion repairs.
Other budget items mentioned included funding for public safety equipment (tasers and body cameras, self-contained breathing apparatus for firefighters), removal of dilapidated structures, park facilities and animal shelter upgrades, and proposed rental fees for the library’s Taylor Auditorium and Rose Garden Center to reduce subsidy from the tourism fund.
During the hearing, several residents asked clarifying questions about how the tax rate translates into individual bills and how appraisal changes and exemptions affect the final tax due. City staff offered to meet individually with residents to explain their valuations and the city component of taxpayers’ total bills, which also include county and school district levies.
The council accepted public comment, closed the hearing and scheduled a second public hearing for Sept. 10 before the council considers adoption of the tax rate and final budget.